KeyBanc Capital Markets initiated coverage of JBT Marel Corp. on Tuesday with an overweight rating and a $150 price target, reflecting confidence in the company’s long-term integration and margin recovery despite near-term execution challenges.
The brokerage set a $150 price target for JBT Marel shares, which were trading at $115.08 at the time of the report. This valuation implies a premium to the company’s current level, even as its stock has declined 26% over the past six months. KeyBanc’s target is based on an estimated 9.9 times 2027 enterprise value to EBITDA, underscoring expectations for margin expansion and operational improvements.
JBT Marel reported adjusted earnings per share of $1.95 for the second quarter, falling short of Wall Street’s $2.02 estimate, while revenue totaled $981 million against expectations of $988.43 million. Despite the miss, the company achieved orders exceeding $1 billion for the third consecutive quarter, a milestone highlighted by KeyBanc as evidence of sustained demand.
Analyst Jeffrey Hammond described JBT Marel as a "self-help story," emphasizing the integration of the JBT and Marel platforms as the primary driver of value creation. KeyBanc noted that the market appears to be discounting execution risks tied to the complexity of the merger and past operational missteps, though it expects margins to recover as milestones are met and synergies materialize.
The poultry equipment cycle remains in a mid-expansion phase, according to KeyBanc, suggesting ongoing demand for equipment and project activity through 2027. The company’s large installed base, robust backlog, and recurring aftermarket revenue provide visibility and mitigate cyclicality, analysts said. Management maintained its full-year outlook despite operational disruptions that contributed to the second-quarter shortfall.
